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RBC: Eyeing Softer CPI Inflation

CANADA
  • Released Feb 21, RBC expect CPI inflation to have eased further in January from 6.3% to 6.1% Y/Y and with a similar 0.2pp dip in traditional core (ex food & energy) to 5.1% Y/Y.
  • Mortgage interest costs have continued to accelerate as previous rate hikes pass through but shelter inflation likely slowed with lower home buying costs.
  • They also see CPI-trim and CPI-median ticking lower [after the two averaged 5.15% Y/Y in Dec at just a tenth of joint cycle highs of 5.25 in Nov] along with a further gradual narrowing in the breadth of inflation pressures.

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